Payment Gap Between New and Used Hits All-Time High
- November 10, 2015
- Posted by Chad Baus
- Comments Off on Payment Gap Between New and Used Hits All-Time High
Did you know that the average monthly payment for a new vehicle was $483, and that the gap between the average monthly payments for new and used vehicles during the second quarter of 2015 reached an all-time high?
That’s the word from Experian Automotive, and it has the experts saying more consumers will be driven to reconsider the cost of paying for a brand new vehicle:
“As the price of new vehicles continues to rise, and the gap between monthly payments for new and used vehicles widens, we see more and more consumers looking for ways to keep their vehicle payments affordable,” said Melinda Zabritski, Experian’s senior director of automotive finance. “This could be especially true for consumers who have the financial ability to pursue a new vehicle but may have sticker shock at the rising prices and don’t want the accompanying high monthly payments.”
At CAR 1, we have often said that our primary customer is someone who can afford a brand new car, but is smarter than that. Perhaps that’s why the average credit score for a new-vehicle loan dropped from last year, while the average credit score for a used loan increased!
More people are realizing that the cost of a brand new car, and the subsequent new-car depreciation, has gotten totally out of hand. In fact, Experian Automotive also reported that the share of used-vehicle financing rose from 53.8% one year ago to an all-time high of 55.5 percent.
More and more people are discovering the wisdom of purchasing a 2 – 3 year-old vehicle and letting someone else pay for that new-car depreciation.
At CAR 1, we feature new-to-you vehicles that, in many cases, only have 20-30k miles on them, and cost thousands less than when the first owner took the hit.
When considering whether to buy new or used, we hope you’ll make the smart decision. Because after all, everybody drives a used car.
Chad D. Baus is the President of Sales and Co-Owner of CAR 1 (www.buycar1.com).